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Sunday, May 04, 2014

Broken Windows and Bent Rims: the Pothole theory of economic stimulus

When I was in high school I had to take a social studies elective. I chose Problems of Democracy, a course taught by one of my favorite teachers. It was rumored to be a very easy class, but the subject matter sounded interesting, so I took it.

Among the many topics covered was the decaying infrastructure of the nation. Many of the bridges, roads, and even highways that we use every day were quite old, and most had not received regular maintenance since their construction. Such things were expensive budget items, and the likelihood of catastrophic failure during any given two-year time span was fairly low, so it was easier to do the minimum maintenance necessary to keep traffic and interstate commerce flowing and leave the problems for the future to deal with.

That was thirty years ago. Things haven't changed much since then. We're still kicking the costs down the road - not just for transportation infrastructure, but also for energy infrastructure, gas mains and electrical grids and nuclear power plants which continue to run well beyond their originally intended lifespans.

In economics there's the "Parable of the Broken Window." In summary: from one point of view, a broken window can stimulate economic activity, at least for the people who repair and replace windows. But from another point of view, the money that is used to repair or replace a broken window s not available to be spent on other things. The broken window may result in a small localized benefit, but it results in a net economic loss to the system.

Pennsylvania has huge infrastructure problems. Heavy truck and commuter traffic along the northeastern corridor which cuts through the state coupled with winters which (except for the few years prior to this one) are typically brutal and full of freeze-thaw cycles results in numerous potholes on local streets, parking lots, around train tracks, on bridges, and interstate highways. This winter has been particularly rough for potholes, possibly because of pent-up pothole precursor conditions that never expressed themselves in the past few years, possibly because of the viciousness of this winter's cold, possibly because of past use of inadequate repair materials. And while some "cold patching" has taken place, a concerted repair effort is not planned, according to some reports, until July.

Is there some massive government-industrial conspiracy to keep the roads full of potholes?

It's not as ridiculous as it sounds. State and local government can see near-term economic savings by postponing repairs - kicking the problem down the road, or even not dealing with it at all in some situations. State and local governments have absolved themselves of responsibility for damage caused to vehicles by potholes: it is, they argue, the responsibility of the driver to be in control of their vehicle at all times. If you hit a pothole, the argument goes, it is either a deliberate act by the driver, or a failure to maintain control of the vehicle by the driver.

So you've hit a pothole. Bent rims, blown tires, sidewall bubbles, broken shocks, bent arms - numerous things can happen when you hit a pothole. Now you need to get your vehicle repaired. After you get those repairs, you should also get an alignment done to avoid uneven wear to your tires. Of course, that alignment will only hold until you hit your next pothole - probably on the way home from getting the repairs done. As long as there are potholes (and you insist on not being in control of your vehicle, you irresponsible driver!) there will be the potential for more damage and more repairs.

Where does the conspiracy come in? Well, consider: the state government saves money not doing pothole repairs. Repair shops and tire stores see an increase in business. And the state sees an increase in tax revenues from the money being spent on repairs and replacements! Everyone benefits. Except, of course, for the people shelling out the money for the repairs and replacement parts.

A friend once cautioned me that you should never ascribe malicious intent to a situation where basic incompetence explains matters just as well. That may very well be the case. But consider: we live in a state where the governor trumpets the fact that he has saved money by cutting thousands of jobs from the state payroll - that is, he has put thousands of former state employees out of work. A state where the governor pledged not to increase taxes, and kept that promise by increasing and in some cases doubling fees for basic state services like car registration and driver's license renewal. It is not inconceivable that a plan that saves money and increases tax revenue by essentially doing nothing would get a green light.

Is this basic incompetence or malicious intent? Are potholes the "broken windows" of the Pennsylvania economy?

1 comment:

There's another broken window theory. Stop replacing broken windows, and vandals realize that the people there don't care about their broken windows or their properties, so they continue to break windows there—and add some graffiti while they're at it. It quickly (and we're not talking about 30 years down the road, either) becomes a place where vandals hang out, and no one wants to live there, either. It's like a festering wound, spreading to the areas surrounding it. People leave. Businesses leave.

That's why it's important to fix potholes everywhere. It does no business any good.

I guess the same thing can be said about poverty. It costs the society as a whole far more to ignore the poor than it does to help them.

Is it a conspiracy? No more than greed, selfishness, and stupidity are conspiracies.

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